House prices up by 11.06% during the year to Q1 2022

Nationwide real house prices soared by 11.06% in Q1 2022 from a year earlier, up from the previous year’s 9.43% growth and its second strongest showing since Q4 2013. Quarter-on-quarter, house prices rose 3.14% during the latest quarter.

The housing market has slowed in recent years, after dramatic government measures to curb speculative house purchases. It started to gain momentum in the second half of 2020, despite the pandemic. 

Demand remains strong despite market-cooling measures

In Q1 2022, property transactions in Taiwan’s six major cities – Taipei, New Taipei, Taoyuan, Taichung, Tainan and Kaohsiung – rose by 4.4% y-o-y to 64,921 units, the strongest quarter in 11 years despite the introduction of market-cooling measures, according to leading real estate agency Taiwan Realty. 

To prevent speculative buying, amendments to the Income Tax Act came into force on July 1, 2021, with a tax of 45% payable on gains from the sale of property within two years of purchase and 35% for gains made after two years. Moreover, the central bank also imposed a fourth round of selective credit controls in December 2021 to slow the housing market. 

Rents, rental yields: amazingly low yields in Tapei at 1.57%

Taipei apartment costs are at $7,112 per sq. m. 

Taiwan: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Taipei $853,440 $1,117 1.57%

Recent news. Taiwan’s economy grew by 3.14% year-on-year in Q1 2022, the lowest growth recorded since Q2 2020, mainly due to weaker consumption, according to the country’s national statistics agency. 

The government recently downgraded its 2022 growth projections for Taiwan to 3.91%, from its earlier estimate of a 4.42% growth. During 2021, the Taiwanese economy grew by 6.28%, its fastest pace in more than a decade, mainly driven by strong tech exports during the Covid-19 pandemic to support people working and studying from home as well as improved consumer confidence.